On 31 December 2025, the first reporting period under the FuelEU Maritime Regulation[1] (“the FuelEU”) ended. The reporting period under the FuelEU equals one calendar year.
Earlier this year, by 31 of January 2026, the companies[2] had to submit the 2025 FuelEU Report for each ship individually to the verifiers[3]. These reports included data and information monitored and reported by the companies during 2025; e.g., the yearly average greenhouse gas (GHG) intensity of energy used on board a ship, and the vessel’s compliance balance, including any compliance surplus or deficit.
On 31 March 2026, the accredited verifier had to record the verified FuelEU Report for each vessel in the FuelEU Database.
During April 2026, the company will need to decide which FuelEU flexibility mechanism it will choose for each vessel. By 30 April 2026, the chosen flexibility mechanism, either banking, borrowing, or pooling, must be recorded in the FuelEU Database. If the company opts for pooling, then the selected verifier for the FuelEU Pool needs to record the pool composition in the FuelEU Database.
Positive and negative compliance balance
A positive compliance balance is generated when the vessel has performed better than required under the GHG‑intensity[4] benchmark for that reporting year, and the ship is considered compliant for that period. Or put differently, if the ship’s actual GHG-intensity is below the annual FuelEU GHG-intensity criterion set, the vessel has a positive compliance balance.
The difference between her lower actual GHG-intensity achieved, compared to the GHG-intensity benchmark set for the ship, is called a compliance surplus.
If the ship’s actual GHG-intensity is above the annual FuelEU GHG-intensity benchmark, then the vessel has a negative compliance balance.
The difference between the GHG-intensity criterion set for the ship and her higher actual GHG-intensity achieved is the vessel’s compliance deficit.
A ship’s compliance is always assessed for the whole reporting year. So, depending on her GHG-intensity performance during the reporting year, she will have either achieved a positive or negative compliance balance. The outcome will decide which flexibility mechanism the company can choose for each vessel.
The FuelEU database
On 23 February 2026, the Commission Implementing Regulation (EU) 2026/394[5] laying down rules for the application of Regulation (EU) 2023/1805[6] of the European Parliament and of the Council, as regards access rights and the functional and technical specifications of the FuelEU database, entered into force.
The primary foundational structure upon which the FuelEU database is built is the THETIS-MRV platform through which any ships calling any port of the European Economic Area (EEA[7]) commercially have been reporting data relevant to calculate GHG emissions and GHG-intensity, for the last years as THETIS-MRV[8] is the platform also used under the EU Emission Trading System (EU ETS).
The FuelEU database should support: (i) companies in reporting each ship’s energy consumption and emissions; (ii) verifiers in the verification process and issuance of the FuelEU document of compliance; and (iii) the administering authorities in accessing and entering the information needed for their activities. The FuelEU database environment shall be connected to the Union Database to allow access to the reported data union wide.
The FuelEU database implementation regulation gives in its Article 3 a clear structure which shareholders shall have access to which data. Such shareholders are the Administering State, the Flag State, the competent authority of the Member State of the port of call, the national accreditation body, the company, the verifier, and the European Commission.
In Article 4, the FuelEU database implementing regulation enables the recording of non-compliance of container and passenger ships, with their obligation to connect to onshore power supply (OPS) in EU ports from 2030 onwards, when using OPS becomes mandatory for every commercial EU port call for these vessel types as per Article 6 of the FuelEU.
Additionally, the implementing regulation sets out the structure for the management of the compliance balance and FuelEU penalties in its Article 5, as well as the recording of the FuelEU document of compliance in the FuelEU database, as per Article 6 of the FuelEU.
The different flexibility mechanisms under the FuelEU
1. Banking
If the vessel achieved a positive compliance balance for the recording year 2025, the company could bank the vessel’s compliance surplus to be used for the following reporting period.
If the company chooses that option, then it must record the banking of the compliance surplus to the following reporting period in the FuelEU database, subject to approval by its verifier.
The banking of the compliance surplus is, however, only possible before the FuelEU document of compliance has been issued, not thereafter.[9] This means that banking of any compliance surplus has to be recorded in the FuelEU database before 30 June of the verification period (2026).
2. Borrowing
If the vessel completed 2025 with a negative compliance balance and the company believes that the vessel will achieve a positive compliance balance for the recording year 2026, then the company can borrow a corresponding advance amount from the vessel’s following reporting year (2026) to balance out the compliance deficit of the ship for 2025.
The advance compliance surplus of 2026 shall be added to the vessel’s compliance in the reporting year (2025), and the advance compliance surplus multiplied by 1,1 shall be subtracted from the same ship’s compliance balance in the following reporting period (2026).[10]
However, the advance compliance surplus cannot be borrowed if either one of the following scenarios applies:
(a) The amount of the advance compliance surplus is exceeding 2% of the limit set out in Article 4(2) of the FuelEU, multiplied by the energy consumption of the ship calculated in accordance with Annex I. In other words, only up to 2% surplus can be borrowed from the following reporting year. Hence, borrowing is only a viable option if the vessel’s compliance deficit of the current year does not exceed 2% of the limit set out in Article 4(2).
(b) For two consecutive reporting periods[11]: If the ship’s compliance deficit is maximal 2% of the limit set for the reporting year 2025 and the company decides to borrow up to 2% from the reporting year 2026, then the company cannot borrow into 2027 for the same ship at all.
If the company opts to borrow an advance compliance surplus for a reporting period (2025), then by 30 April of the verification period[12] (2026), the company shall record the advance compliance surplus, following approval by its verifier, in the FuelEU database.[13]
Where a vessel does not call any EU port commercially during a reporting year but borrowed an advance compliance surplus in the previous reporting period, the company will need to pay the FuelEU penalty as referred to in Article 23 (2) of the FuelEU, which the company initially avoided by means of borrowing that advance compliance surplus, multiplied by 1,1.[14] Therefore, before opting to borrow into the following reporting year, the company should be certain that the ship will trade commercially to EU ports during that following year.
3. Pooling
If the vessel has achieved a negative compliance balance for 2025, the company can opt to balance out the vessel’s compliance deficit by putting her in a FuelEU Pool.
The way a FuelEU Pool operates is to have at least one over-compliant ship in the pool which shares its surplus with vessels that have a negative compliance balance, so that these non-compliant ships have a lower compliance deficit after the allocation of the pooled compliance. Also, the ship(s) which had a compliance surplus[15] cannot have a compliance deficit after the allocation of the pooled compliance[16]. Finally, the total pool compliance[17] of a FuelEU Pool must be positive, as otherwise the pool is not valid.[18]
The compliance balances referred to in Article 4(2) of the FuelEU and, if applicable, the RFNBO[19] subtarget as referred to in Article 5(3) of two or more ships, as calculated in accordance with Article 16(4), may be pooled to meet the GHG intensity targets as set out in Article 4 and, if applicable, Article 5(3) for RFNBOs.[20]
Article 21(1) of the FuelEU clearly sets out that a ship’s compliance balance may not be included in more than one pool in the same reporting period. So, if a vessel is chartered out to several time-charterers during a reporting period and during one charter period she is put into a FuelEU Pool, but then taken out of said pool at redelivery, she will in this instance, not be able to being entered into another pool for a later charter period during the same reporting year.
However, two separate pools may be used for GHG intensity target and for the subtarget for RFNBO[21].
The company has time to enter any vessel with a compliance deficit for the reporting period into a FuelEU Pool by 30 April of the following year. So, for 2025, companies can enter non-compliant ships into FuelEU Pools until 30 April 2026, provided they find a pool the vessel can join for the 2025 reporting year.
If the company decided to include the ship’s compliance balance in a pool, the allocation of the total pool compliance balance to each individual ship, and the choice of the pool verifier selected for verifying that allocation shall be registered in the FuelEU database by the company. [22]
Article 21(3) of the FuelEU sets out that where the ships participating in the FuelEU Pool are controlled by two or more companies, the pool details registered in the FuelEU database, including the allocation of the total pool compliance balance to the pool’s ships and the choice of the verifier selected for verifying the allocation of the total compliance balance of the pool to each individual ship, shall be validated in the FuelEU database by all the companies concerned in the pool.
A ship shall not be included in a FuelEU Pool if she does not hold a valid FuelEU document of compliance, hence does not comply with the obligation set out in Article 24 of the FuelEU[23]. This will not apply for the reporting period of 2025 as it was the first reporting year; it will, however, apply for the following reporting years.
If the total pool compliance balance results in a compliance surplus for an individual ship, the company can bank such surplus as per Article 20(1) of the FuelEU.[24]
If a vessel is participating in a FuelEU Pool, she cannot borrow into the compliance surplus of the following reporting year as per Article 20(2) of the FuelEU.[25]
By 30 April of the verification period (2026), the selected verifier of the FuelEU Pool shall record in the FuelEU database the definitive composition of the pool and allocation of the total pool compliance balance to each individual ship[26].
If a vessel cannot fully cover its compliance deficit with a compliance contribution from the FuelEU Pool, then the company has to pay the FuelEU Penalty for the remaining compliance deficit.
4. FuelEU Penalty
The verifier of the ship must record the verified compliance balance as referred to in Article 4(2) of the FuelEU and, if applicable, for the subtarget for RFNBOs as set out in Article 5(3) before 1 May of the verification period (2026). [27]
The administering State[28] of the company shall ensure that, for any of its ships having a compliance deficit for GHG intensity[29] or, if applicable, for the subtarget for RFNBOs[30] on 1 June of the verification period (2026), after a possible validation by its competent authority, the company shall pay by 30 June of the verification period (2026) an amount equal to the FuelEU penalty resulting from the application of the formulas specified in Part B of Annex IV.[31]
If a ship has a compliance deficit for two consecutive reporting periods or more, that amount shall be multiplied by 1 + (n -1)/10, where n is the number of consecutive reporting periods for which the company is subject to a FuelEU penalty for that ship[32]. In consequence, this means that if a ship changes companies the penalty amount will not be multiplied for the first reporting year the vessel is with her new company.
Where a ship does not have any port call in the EU during the reporting period and borrowed an advance compliance surplus in the previous reporting period, the competent authority of the administering State shall notify by 1 June of the verification period, to the company concerned, the amount of the FuelEU penalty as referred to in Article 23(2) that it initially avoided by means of borrowing that advance compliance surplus, multiplied by 1,1.[33]
In such a situation, the administering State in respect of a company shall ensure that the company pays by 30 June of the verification period an amount equal to the FuelEU penalty notified pursuant to the above paragraph[34].
Article 23(7) of the FuelEU demands that any compliance balance, as well as payments of FuelEU penalties, shall be recorded without delay in the FuelEU database by the entities that performed those actions or made that payment.
As per Article 23 (8) and (9), the company shall remain ultimately responsible for the payment of the FuelEU penalties.
FuelEU document of compliance
Article 22(1) of the FuelEU states that by 30 June of the verification period (2026), the verifier shall issue a FuelEU document of compliance for the ship concerned, provided that the ship does not have a compliance deficit further to application of Articles 20 and 21, does not have non-compliant port calls and complies with the obligation to hold a valid FuelEU document of compliance as set out in Article 24.
Where FuelEU penalties are due as per Article 22(2), the competent authority of the administering State shall, by 30 June of the verification period, issue a FuelEU document of compliance for the ship concerned, provided that an amount equal to the FuelEU penalties has been paid.
The FuelEU document of compliance shall be valid for a period of 18 months after the end of the reporting period or until a new FuelEU document of compliance is issued, whichever occurs earlier.[35]
The verifier or, where applicable, the competent authority of the administering State shall record the issued FuelEU document of compliance in the FuelEU database without delay.[36]
Obligation to hold a valid FuelEU document of compliance
By 30 June of the verification period (2026), ships calling at a port under the jurisdiction of a Member State, arriving at, staying within or departing from a port under the jurisdiction of a Member State, or which have carried out voyages during the corresponding reporting period, shall hold a valid FuelEU document of compliance.[37]
The FuelEU document of compliance issued for the ship concerned in accordance with Article 22 of the FuelEU shall constitute evidence of compliance with this Regulation, as per Article 24(2).
Enforcement
Article 25(2) of the FuelEU gives each EU Member State not only the right but demands that each state shall ensure that any inspection of a ship in a port under its jurisdiction (port state control[38]) carried out includes checking that the ship holds a valid FuelEU document of compliance.
Where a ship fails to comply with the obligation having to present a valid FuelEU document of compliance, for two or more consecutive reporting periods, and where other enforcement measures have failed to ensure compliance with Article 24, the competent authority of the Member State of the port of call may, in respect of a ship not flying the flag of that Member State and after giving the opportunity to the company concerned to submit its observations, issue an expulsion order.
Where the competent authority of the Member State of the port of call decides to issue an expulsion order, it shall notify that order to the Commission, the other Member States and the flag State concerned through the FuelEU database.[39]
Every Member State, with the exception of the Member State whose flag the ship is flying, shall refuse entry of the ship which is subject to the expulsion order into any of its ports until the company fulfils its obligations. Where a ship fails to comply with the obligation set out in Article 24 for two or more consecutive reporting periods and enters into a port of the Member State whose flag it flies, the Member State concerned shall, while that ship is in one of its ports, after giving the opportunity to the company concerned to submit its observations, order a flag detention until the company fulfils its obligations.
The company of the vessel carries the compliance burden and shall confirm compliance with the obligation to hold a valid FuelEU document of compliance by notifying a valid FuelEU document of compliance to the competent national authority which issued the expulsion order. If the ship is in distress as per international law a port of refuge call is exempted and access to a port may be granted[40].
Article 24(5) of the FuelEU obliges that Member State to notify, through the FuelEU database, the Commission, the other Member States and the flag State concerned of sanctions against a specific ship by that Member State.
Summary
Any non-compliance with the FuelEU will follow the vessel, not the company, as under the EU ETS. From latest 1 July 2026, each port state control authority in each of the 27 EU Member States will check if the ship carries a valid FuelEU document of compliance. Vessels which have not called any EU port commercially during the reporting year 2025 will of course not have valid FuelEU document of compliance on board, but they do not need it.
With the FuelEU database being connected to the Union database it should be easy for port state control officers to check whether a ship had called an EU port during 2025 in cases where a vessel does not carry a valid FuelEU document of compliance on board. If there are records that she had called an EU port on a commercial voyage, then a Member State may look into possible enforcement measures. It is recommended that ships ensure compliance with the FuelEU to avoid restrictions of the vessel’s trading possibilities within the EU.
If you have any questions about this topic, please contact your usual Skuld contact.
[1] Regulation (EU) 2023/1805 of the European Parliament and of the Council of 13 September 2023 on the use of renewable and low-carbon fuels in maritime transport, and amending Directive 2009/16/EC
[2] “Company” refers to the entity responsible for ensuring compliance with this Regulation should be the company, defined as the shipowner or any other organisation or person, such as the manager or the bareboat charterer, that has assumed responsibility for the operation of the ship from the shipowner and that, on assuming such responsibility, has agreed to take over all the duties and responsibilities imposed by the International Management Code for the Safe Operation of Ships and for Pollution Prevention as implemented within the Union by Regulation (EC) No 336/2006 of the European Parliament and of the Council.
[3] “Verifier” means a legal entity carrying out verification activities, which is accredited by a national accreditation body pursuant to Regulation (EC) No 765/2008 and FuelEU.
[4] A vessel’s GHG intensity is calculated on the basis of grams of CO2 equivalent per megajoule (gCO2eq/MJ) for a calendar year under FuelEU as per Article 23(2) and Annex IV FuelEU.
[5] ‘The FuelEU implementing regulation’
[6] ‘The FuelEU’
[7] EEA = all 27 EU Member states plus Norway, Iceland, and Liechtenstein.
[8] ‘THETIS-MRV’ means the automated Union operation system run by EMSA pursuant to Regulation (EU) 2015/757.
[9] Art. 20(1) FuelEU
[10] Art 20(2) FuelEU
[11] Art 20(2) FuelEU
[12] The verification period under the FuelEU is the period from 1 January until and including 30 April in the year immediately following the reporting year.
[13] Art 20(3) FuelEU
[14] Art 20(4) FuelEU
[15] As calculated in accordance with Art 16(4) FuelEU
[16] As calculated in accordance with Art 16(4) FuelEU
[17] Art 3(38) FuelEU: ‘total pool compliance balance’ means the sum of the compliance balances of all ships included in the pool.
[18] Art 21(4) FuelEU
[19] RFNBO = Renewable Fuel of Non-Biological Origin; these are e-fuels e.g. Ammonia or Methanol.
[20] Art 21(1) FuelEU
[21] Art 21(1) FuelEU
[22] Art 21(2) FuelEU
[23] Art 21(5) FuelEU
[24] Art 21(6) FuelEU
[25] Art 21(7) FuelEU
[26] Art 21(8) FuelEU
[27] Art 23(1) FuelEU
[28] The relevant provisions of Directive 2003/87/EC of the European Parliament and of the Council should be applied to determine the administering State in respect of each company.
[29] As per Article 4(2) FuelEU
[30] As per Article 5(3) FuelEU
[31] Art 23(2) FuelEU
[32] Art 23(2) FuelEU
[33] Article 20(4) FuelEU
[34] Art 23(3) FuelEU
[35] Art 22(4) FuelEU
[36] Art 22(5) FuelEU
[37] Art 24(1) FuelEU
[38] Port state control as per EU Directive 2009/16/EC
[39] Art 24(3) FuelEU
[40] Art 24(4) FuelEU